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re: Why is crypto crashing?
Posted on 5/26/22 at 1:15 pm to TigerTatorTots
Posted on 5/26/22 at 1:15 pm to TigerTatorTots
quote:
People just have to accept the fact that this is how literally any financial investment works. You will not get any return in any asset class if people don't buy in after you to increase the price.
Not exactly. Market value Vs book value.
Stock ownership gives you a share in the ownership in a company which is then traded through a market. The value of the shares are called “market value” and they can trade above, below or equal to “book value” which is the real value of the company based on real fundamental measures like revenue, expenses, property owned, equipment owned, etc.
But since you bring it up and hopefully now better understand the difference, what is the underlying value of bitcoin or ethereum or whatever coin you favor?
This post was edited on 5/26/22 at 1:16 pm
2
Posted on 5/26/22 at 1:22 pm to SlidellCajun
No, You are changing the topic at hand. The poster I was responding to was calling it a ponzi due to the fact that returns are made from later money coming in. Please explain how that is not the case for all the other traditional investments. Book value has nothing to do with that original statement of "if you buy in you will get a return from people buying in after you". We talking strictly returns and that is market value.
Posted on 5/26/22 at 1:28 pm to SlidellCajun
quote:But to answer your question which has been answered hundreds of times on this board - the underlying value of bitcoin is that it is the largest, most secure, most decentralized network on the planet. It can settle cross border billion dollar transactions in minutes and for the cost of maybe a cup of coffee. I am investing in the future potential of its utilization as a global settlement layer of financial transactions as well as mass adoptions of day to day payments via the Lightning network which is free and instant for users and merchants (no 3% fee to Visa/AMEX/etc). It is an investment on future potential and adoption. No different than an investment in a stock that has future potential.
what is the underlying value of bitcoin or ethereum or whatever coin you favor?
This post was edited on 5/26/22 at 1:29 pm
Posted on 5/26/22 at 2:38 pm to Fox McCloud
quote:
Crypto is a scam, hope it crashes to zero
As someone else has already asked, why do you wish this? Why do you want others to lose money?
Everyone knows the answer, I just want to hear you say it. Which you won't
This post was edited on 5/26/22 at 2:39 pm
Posted on 5/26/22 at 2:55 pm to tenderfoot tigah
quote:
The PulseX exchange will flow billions of dollars daily.
Will you acknowledge that there is a very real chance this does not occur? If so, you're proving my point that buying pulsecoin tokens is essentially making an investment in the pulsex exchange itself. The tokens aren't necessary to do that. The only logical reasons the pulsex exchange founders decided to sell pulsecoin tokens instead of stock in the pulse exchange are (i) to avoid financial disclosures, (ii) to avoid regulatory oversight, and (iii) to avoid market scrutiny of the equity pricing. None of those sound like good incentives to buy in.
quote:
Let me break it down more simply for you stock guys. You buy NASDAQ stock. Every transaction on the NASDAQ has a .07% fee. That fee goes to share buybacks. That would create an extremely valuable stock. This is what's happening with PulseX.
But there's a pretty large flaw in your logic. You're not buying into an existing, well-established stock exchange like NASDAQ; you're buying into the founders' plan to launch an exchange that becomes that successful. You could wind up owning equity in a small pink sheet exchange that no one uses. Or, even worse, you could wind up getting scammed if the founders never execute and run away with all the money. The crypto sphere is overinflated because concepts like tokenomics make people forget about risk.
This post was edited on 5/26/22 at 2:58 pm
Posted on 5/26/22 at 3:28 pm to TigerTatorTots
quote:
Please explain how that is not the case for all the other traditional investments
I'm really interested to see a response to this. It's one of the biggest arguments against crypto, but it isn't unique to crypto at all.
Posted on 5/26/22 at 3:39 pm to LordSaintly
I wouldn't wait around for an answer. The question is asked every time someone says crypto is a ponzi and needs more people to buy yet no one will answer it.
Posted on 5/26/22 at 4:56 pm to SlidellCajun
quote:
The question to me is why do you ignore the currency aspect of crypto currency? It’s actually what it was intended for.
A very small percentage of crypto projects and tokens exist to compete with USD. You’re hung up on the wrong thing but you keep reiterating it over and over again. Dig deeper.
This post was edited on 5/26/22 at 5:05 pm
Posted on 5/27/22 at 4:58 am to DeathValley85
If anyone wants to educate themselves about the utility and/or value of different tokens, here is a good link. This website ranks tokens by market cap. You can click on each token and read a short description of what makes each token unique.
Coinmarketcap
Coinmarketcap
Posted on 5/27/22 at 7:28 am to tenderfoot tigah
quote:
market cap
Market cap is an awful way to assess crypto value. It’s a mirage. It’s like giving Powerball a “market cap” based on the amount spent on pending tickets.
Posted on 5/27/22 at 7:52 am to Jon Ham
quote:
Market cap is an awful way to assess crypto value. It’s a mirage. It’s like giving Powerball a “market cap” based on the amount spent on pending tickets.
So can we assume the Rock comparisons are over and now we are on to Power Ball?
Posted on 5/27/22 at 8:21 am to JayDeerTay84
Would you prefer I compare digital strings of random code to stocks or the dollar? That doesn’t get any prettier for you.
Posted on 5/27/22 at 8:33 am to TigerTatorTots
quote:
No, You are changing the topic at hand. The poster I was responding to was calling it a ponzi due to the fact that returns are made from later money coming in. Please explain how that is not the case for all the other traditional investments
I’m not implying that crypto currency is a ponzi scheme. I was posting that the value of crypto currency, as set by the market is not exactly the same as the value of a stock set by the market.
How the value of crypto differs from other investments seems clear as day to me-
markets are designed to give people a place to efficiently trade stuff - stocks, bonds, currency etc. we hope that the markets get it right but there are definitely times when pricing gets out of whack.
With stocks there is a way to know if something is valued higher, lower or equal to certain measurables. I can look at price to earnings, price to book, debt levels…
I don’t know how to do that with crypto currencies. I can sort of measure other currencies but certainly no expert.
That said, I trust the currency markets as they have a long history trading currencies.
I’m not a trader or direct investor in currencies of any sort. When I think of a currency, I look at stability first and foremost. I want to use and own a stable currency after all.
When I see a currency trading with the volatility, I suspect problems with that currency. Again, I trust the market to get that right. I really have no way of knowing the efficiency the crypto currency market though.
I’m guessing you do? I’m guessing you think the value of Bitcoin is undervalued?
If this is correct, please educate me.
This post was edited on 5/27/22 at 8:37 am
Posted on 5/27/22 at 8:36 am to SlidellCajun
quote:Ok then, what measurables do you look at for gold/silver, trading cards, fine art, collectables, land?
With stocks there is a way to know if something is valued higher, lower or equal to certain measurables. I can look at price to earnings, price to book, debt levels…
quote:See my previous post on why.
I’m guessing you think the value of Bitcoin is undervalued? If this is correct, please educate me.
This post was edited on 5/27/22 at 8:37 am
Posted on 5/27/22 at 8:44 am to TigerTatorTots
(no message)
Posted on 5/27/22 at 9:28 am to TigerTatorTots
quote:
Ok then, what measurables do you look at for gold/silver, trading cards, fine art, collectables, land?
Very different with all of the above.
Gold and silver- not a big investor but I can appreciate their value as commodities. Humans need metals. I know that there is demand and limited supply. I trust the markets that they trade albeit I think there are times where the market value gets out of whack. Again, not a big investor.
Land and real estate- I am an investor and owner. I can appreciate the supply and demand equation. Humans have a need for shelter. They need land. Building costs are real (albeit I suspect lumber prices got out of whack due to market manipulation for a while)
Land is finite. I have learned some tricks on how to create value. I know and trust the markets that I own and invest.
The other items are not things that I invest in. Humans don’t need cards, art, or antiques. I do own antiques, fine art, guns, and other collectibles but not as trading items. I know people that do it. I struggle with the demand side of those things. I know Monet art has value but personally I am not attracted to it.
I did trade guns and ammo for a bit and had fun with it. I played the political angles and it worked out well. I trusted gunbroker as a market and still do.
Crypto currency ie Bitcoin or Ethereum- I don’t NEED it. Does anyone?
I read your replies about how you value crypto currency (bitcoin) but I think it lacks substance. What exactly do you use to measure the market value against the actual value?
When bitcoin was at 66,000 versus the usd, did you view it as overvalued? Why or why not?
How about now at 29,000? Guessing you think it’s undervalued. Why or why not?
Why is bitcoin crashing?
This post was edited on 5/27/22 at 11:04 am
Posted on 5/27/22 at 9:37 am to SlidellCajun
quote:
Why is bitcoin crashing?
Because the holders don't think there are as many greater fools as there were 6 months ago. There's no other reason besides the diminished prospect of someone else buying at a higher price.
Posted on 5/27/22 at 10:01 am to SlidellCajun
I think cryptos analog analogy is radio. 75 years ago there was investment value in AM radio stations which had finite frequencies. Fast forward a few years and FM comes along. AM remains useful but investment transitions to the technologically superior medium. Then television frequencies come along and devalue radio. Speculators continue to tout future use cases and the value of early adoption. But nobody addresses obsolescence. What are the odds a crypto developed today will maintain its desirability when a better version is always around the corner. I can’t think of a scenario where people look back in fifty years and reflect on crypto like a hipster music collector does vinyl records. “Wow, crypto v.50 is great, but it can never match what we had with crypto v.1”
Posted on 5/27/22 at 10:14 am to JKLazurus
Posted on 5/27/22 at 10:20 am to JKLazurus
quote:
I think cryptos analog analogy is radio. 75 years ago there was investment value in AM radio stations which had finite frequencies. Fast forward a few years and FM comes along. AM remains useful but investment transitions to the technologically superior medium. Then television frequencies come along and devalue radio. Speculators continue to tout future use cases and the value of early adoption. But nobody addresses obsolescence. What are the odds a crypto developed today will maintain its desirability when a better version is always around the corner. I can’t think of a scenario where people look back in fifty years and reflect on crypto like a hipster music collector does vinyl records. “Wow, crypto v.50 is great, but it can never match what we had with crypto v.1”
You could say this about many investments and companies throughout history. Crypto is in the 2nd inning of adoption. It's still growing and developing at a rapid rate.
Major companies that no longer exist
This post was edited on 5/27/22 at 10:22 am
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